EU Parliament backs CO2 cap on air traffic

MEPs have backed the idea of including aviation in the EU’s cap-and-trade system for CO2 emissions and for ending tax exemptions on kerosene. The airline industry reacted furiously, saying the proposals totally ignore economic realities.

The European Parliament on 4 July has voted by 439 in favour, 74 against and 102 abstentions in favour of measures to address the impact of aviation on the world climate and apply the ‘polluter pays principle’ to international flights.

The report, drafted by MEP Caroline Lucas (Greens/EFA, UK), is a non-binding one as there is no formal proposal on the table yet. But it sends a strong political message at a moment when the Commission is drafting a legislative proposal to include aviation in the EU emissions trading scheme, due before year end.

The Parliament suggested that aviation falls under a special pollution-cutting scheme, similar to the ETS but separate from it. In a first stage, a pilot phase would be launched, covering the period 2008-2012, which corresponds to the second trading period of the ETS. Then, when aviation is eventually incorporated into the wider ETS, special conditions would apply to ensure it does not distort the market to the detriment of less protected sectors. Special conditions could for example include a cap on the number of emissions rights the aviation sector is allowed to buy from other sectors as well as a requirement to reduce emissions without trading.

Other proposals in the report include:

  • the introduction of a kerosene tax on intra-EU flights (flights en route to non-EU destinations would be exempted)
  • a recognition that other tax exemptions enjoyed by air transport lead to “very unfair competition between aviation and other transport sectors”. However, specific calls to end VAT tax exemptions, supported by the Greens, failed

However, there is little chance that these options will be considered by the Commission when it tables it legislative proposal later in the year. Indeed, the introduction of specific taxes on aviation has already been ruled out by the Commission as the unanimity rule means it has little chance of going past the EU Council of Ministers.

The Parliament's rapporteur on the dossier, Caroline Lucas MEP (Greens/EFA, UK), is leading the crusade to end what she sees as a preferential treatment for aviation within the transport sector. "Aviation is the fastest growing source of greenhouse gas emissions, with flights set to double by 2020, yet the sector continues to avoid regulation and enjoy distorting breaks," said Lucas. 

And she believes that the non-CO2 impacts of aviation, such as water vapour condensation trails, should be tackled as well. "The total climate impacts of aviation are 2-4 times more damaging than those from CO2 alone and any legislation ignoring this would be short-sighted. Ideally, the non-CO2 impacts could be addressed by an emissions charge but, failing that, the use of multipliers on CO2 emissions in a future aviation emissions trading scheme is another viable alternative. 

Airlines reacted angrily at the Parliament report, saying it "missed the opportunity to promote a realistic strategy" and instead opted for "the most restrictive and punitive measures possible".

Sylviane Lust, director of the International Air Carrier Association (IACA), said: "Any approach to aviation and the environment which calls for the simultaneous introduction of taxes on aviation fuel, VAT on airline tickets, environmental charges at airports and emissions trading scheme (ETS) totally ignores economic realities. Moreover the recommendation to set up a separate ETS scheme for aviation is totally unrealistic."

IACA says the measures supported by Parliament should undergo deeper analysis to determine what would be their consequences on the European economy, jobs and the general quality of life of European citizens.

The liberal democrats in the European Parliament (ALDE) adopted a more conciliatory tone than their fellow Green colleagues. "Our message is that airline operations can continue to expand, but only as fast as improvements in technology and better operating practices permit," said UK LibDem MEP Chris Davies. "We don't want to stop air travel. We simply want to ensure that its growth is not at the expense of future generations. Total carbon dioxide emissions must increase no further."

Holger Krahmer MEP, a German liberal of the FDP party (also a member of the ALDE) criticised Ms Lucas' report for being "a good example of ecopopulism". Krahmer observes that the constant high prices of kerosene have already forced air transport companies to save fuel and therefore, reduce CO2 emissions. He says sensible measures to further cut fuel consumption could be achieved through other measures such as better management of flight routes.

On the eve of the Parliament's vote, the European Federation for Transport and Environment (T&E), an environmental NGO, issued a report showing a steady rise in CO2 emissions from aviation over the last decade. The report, based on figures from the European Environment Agency (EEA), says CO2 emissions from international flights increased by 85% between 1990 and 2004, an average increase of 4.5% per year. It says the increase in emissions "cancels out almost one quarter of the reductions made over the same period by other sectors in Europe under the terms of the Kyoto protocol".  

Jos Dings, director of T&E said, "Since Kyoto was signed, other sectors have been cutting emissions, while those from the gas-guzzling aviation sector have almost doubled. Meanwhile, governments have showered the sector with subsidies and tax breaks. It is high time Europe got its head out of the clouds, got the aviation sector in line with other polluters and started demanding emissions cuts."

The European Commission suggested including aviation in the EU's emissions trading scheme (ETS), in a Communication published on 27 September 2005. Under the proposal, a cap on CO2 would be set for all flights departing from the EU.

Air traffic is estimated to contribute to about 3.5% of the total share of human activities held responsible for climate change. This share is expected to grow to 5% by 2050 and threatens to undermine global warming mitigation efforts made in other industrial sectors.

  • End 2006: Commission to table a formal legislative proposal to integrate aviation in EU-ETS. It would have to be adopted by the European Parliament and member states at the EU Council of Ministers, a process which usually takes two to three years.

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